Al Madina Insurance Company moves closer towards its Takaful conversion - IFN

Al Madina Insurance Company moves closer towards its Takaful conversion

Daily Cover

OMAN: In a bid to convert its status to a Takaful operator, Al Madina Insurance Company will be floating an IPO which is tentatively slated for October or November. Speaking to a local daily, Abdulrahman Awadh Barham, deputy chairman of Al Madina, said: “The size of the issue is around OMR6.5 - 7 million (US$16.83 - 18.12 million) and it is going to be a premium issue.” Having initially announced its IPO plans in June, the firm intends to operate as a fully-fledged Shariah compliant insurance company from January 2014 onwards. With a paid-up capital of OMR10 million (US$25.89 million), Al Madina is said to offer up to 40% of its holding in the company for the IPO. Following the adoption of Islamic finance in the sultanate last year, the Capital Market Authority (CMA) has granted in-principle approvals to several insurance companies including Al Madina, to establish themselves as Takaful operators. The CMA of Oman subsequently issued a draft regulation requiring insurance firms to be listed as public companies before being able to function as Takaful operators. Established in 2006, Al Madina which is registered as a private entity, first announced its intentions of converting into a Takaful firm last year. With the potential to become the first Takaful insurer in Oman, the company has set its sights on offering life, medical and non-life Takaful products. Earlier in March, Al Madina was assigned a ‘Ba2’ insurance financial strength rating by Moody’s, reflecting the company’s good market position within the domestic insurance market. The rating agency also recently projected that the sultanate’s Islamic banking industry is expected to command up to 8% share of the banking system assets in the next three to five years.